After the Commercial Clean Vehicle Credit (Section 45W) expired on September 30, the “experts” rushed out predictions of an EV sales slowdown in Q4. But, with over 6,800 pages in the Internal Revenue Code still in play, a turbocharged Section 179 tax credit could still power a strong Q4 for commercial EVs.
The One Big, Beautiful Bill Act (OBBBA) of 2025 gutted America’s energy independence goals and ensuring its auto industry would fall even further behind the Chinese in the EV race, but the loss of Section 45W wasn’t the only change written into the IRS’ rulebook. Section 179, an immediate expense reduction that business owners can take on depreciable equipment assets, has been made significantly more powerful for 2025.
The section 179 expense deduction is limited to such items as cars, office equipment, business machinery, and computers. This speedy deduction can provide substantial tax relief for business owners who are purchasing startup equipment.
The revised Section 179 tax credit (or, more accurately, expense reduction) allows for a 100% deduction for equipment purchases has doubled to $2.5 million, with a phase-out kicking in at $4 million of capital investments that drops to zero at $6.5 million. That credit and can be applied to new and used vehicles, as well as charging infrastructure, battery energy storage systems, specialized tools, and more (as long as they’re new to you).
Work the tax credit
“But wait,” as they say. “There’s more!” A revised Section 168(k) also allows for bonus depreciation on eligible equipment and property, accelerating depreciation for a reduced tax burden.
Fleets can take both the bigger Section 179 and 168(k) bonus depreciation allowances, but Section 179 must be applied first, leaving only qualifying purchases over the $2.5 million limit to be taken in bonus depreciation.
It’s a bit convoluted (what good tax code isn’t?), but these tax incentives are great for businesses looking to buy enough electric equipment assets to exceed the Section 179 spending limit – and, given the new Uber/Tesla semi truck purchase plan, the continued growth of the electric terminal tractor market, and the willingness of several utilities to incentivize both electric commercial vehicles and the deployment of smart EV charging infrastructure, that number may be bigger than you think.
Electrek’s Take Disclaimer
Tax law is weird. Not only are there Federal tax laws and rules that need to be followed, but state and even local county and city rules, as well. As such, you want to make sure they don’t get you the way the got Capone.
Even worse, your favorite journalist (Hi!) is probably an idiot. Get a certified accountant and tax law expert to help walk you through the dirtier details of your specific scenario – but don’t let the complexity of human interaction slow you down, either. The really rich guys you know pay pennies on the tax dollar compared to you and me, because they’re not afraid to ask their accountants for help.
The TL;DR version, though, is this: there’s still plenty of incentives out there for fleet operators looking to electrify their operations.
SOURCES | IMAGES: Equipment World, Investopedia, Volvo.
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